The House Judiciary Committee’s Antitrust Subcommittee this week released the 400-page findings of its 16-month investigation into the “state of competition in the digital economy.”
The predetermined results cited a "clear and compelling need" to "strengthen antitrust enforcement and consider a range of forceful options, including structural separations and prohibitions on anticompetitive conduct” against the likes of Facebook, Amazon, Apple and Google.
The use of the word “force” is telling, given the voluntary nature of markets and consumer choice.
Antitrust regulation is a prominent illustration of how unhinged and concentrated hyper-regulatory power, not just spending authority, enables and encourages massive compulsory transfers of wealth by government. Every generation or so we go through the motions of “modernizing” antitrust only to invent complex new rationales reviving it for every major new frontier sector because, this time, we really mean it, it’s really different and government needs to step in.
Market actors today find themselves accused by so-called trustbusters of being too big, reducing consumer welfare, raising rivals’ costs, and—in the latest iteration—of doing other bad things like interfering with free speech.
In a release accompanying the new report, House Judiciary Committee Chairman Jerrold Nader (D-New York) proclaimed, "As they exist today, Apple AAPL -2.9%, Amazon AMZN -3.1%, Google GOOG -2.2%, and Facebook each possess significant market power over large swaths of our economy. In recent years, each company has expanded and exploited their power of the marketplace in anticompetitive ways."
It would have been more appropriate for Nadler to have acknowledged, “As it exists today, the Federal government and state co-conspirators possess significant market power over large swaths of our economy.” The sane, good-government “consumer welfare standard” is no match for that fervor, so the antitrust subcommittee produced this “slate of recommendations” instead:
- Structural separations to prohibit platforms from operating in lines of business that depend on or interoperate with the platform;
- Prohibiting platforms from engaging in self-preferencing;
- Requiring platforms to make ... services compatible with competing networks to allow for interoperability and data portability;
- Mandating that platforms provide due process before taking action against market participants;
- Establishing a standard to proscribe strategic acquisitions that reduce competition;
- Improvements to the Clayton Act, the Sherman Act, and the Federal Trade Commission Act, to bring these laws into line with the challenges of the digital economy;
- Eliminating anticompetitive forced arbitration clauses;
- Strengthening the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice;
- And promoting greater transparency and democratization of the antitrust agencies.
Republicans agree with many of these and with antitrust intervention generally, as made clear by the antitrust subcommittee minority response issued by Rep. Ken Buck (R-Colorado). A contemporaneous Trump tweet on his displeasure with the tech giants’ content moderation cap-yelled, "REPEAL SECTION 230!!!”
Section 230 is the slice of the 1996 Communications Decency Act that shields websites from liability for user-generated content, and it now weighs heavily in the antitrust revival. Monkeying with Sec. 230 would actually benefit the giants from one perspective, since they will inevitably have a hand in the modifications, and since a rival of their scale could never emerge without its protections. What’s for sure is that gullible Republicans will not control the administrative apparatus affirming the “neutral” political speech they demand. Yet there’s plenty more antitrust advocacy to be found in the GOP ranks, which, sadly, reveals they are advocates of the administrative state.
Antitrust is something of the original sin of the administrative state, though there were major classes of government intervention preceding it such as national banking, tariffs, public subsidies and the infamous Interstate Commerce Commission. Republicans’ continued antitrust boosterism means they prefer yielding to the administrative state rather than insisting upon adherence to the constitutional one; that renders their concern about over-regulation elsewhere suspect as well. As a category of unpredictable government intervention openly hostile to property rights, antitrust’s very presence is distortionary, perhaps more so than other forms of regulation.
Over a hundred years after the smokestack era that spawned antitrust, companies competing in code are being treated as essential facilities by both left and right. We now find demands made for the most extreme “remedy” of all — corporate breakup — which has not proven beneficial to consumers in the past. Apparently we can only satisfy all parties if all search results appear first.
Read the full article at Forbes.